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Mentors help minority firms

Joyce M. Rosenberg, Associated Press;
12:15 a.m. EDT April 17, 2014

Mel Gravely, president of TriVersity Construction in Cincinnati, had his business join a program called a minority business accelerator. It helped the company get started and win contracts that have helped Triversity’s revenue double.
(Photo:
Al Behrman/AP
)

NEW YORK – Mel Gravely says his construction company might not exist today if he didn’t have mentors to guide it.

Gravely’s company, TriVersity, joined a program called a minority business accelerator even before he bought a controlling interest in the Cincinnati-based company in 2006. It helped the company get started and win contracts that have helped TriVersity’s revenue double.

“I don’t make any move at all without getting the input of the accelerator,” Gravely said.

Minority business accelerators have launched in a handful of metropolitan areas in recent years as local businesses, chambers of commerce and economic development groups work to create more jobs and improve the quality of life in their regions. The Cincinnati accelerator, created by the Cincinnati USA Regional Chamber in 2003, has inspired officials and business people in the Greenville, S.C.; Charlotte, N.C., and Newark, N.J. areas to start similar programs.

A key goal of the accelerators is to help minority owned-companies win contracts with large companies. Despite the rapid growth in the number of minority-owned businesses — over 45 percent between 2002 and 2007, according to the Census Bureau — they struggle to get business with major companies. Many don’t have the ability to fulfill million-dollar contracts, something the accelerators aim to change. But there’s also a lingering perception that minority companies can’t do the job or can’t do it well, according to business owners and professors who study minority business.

“Most people are not racist. They just don’t like to change,” said Crystal German, vice president of economic inclusion at the Cincinnati Chamber.

What are accelerators?

Accelerators help companies speed up growth. The programs focus on a small number of companies that have shown potential to succeed and create jobs. To be in the Cincinnati program, a company must already be well-established, have annual revenue of $1 million or more and have a business plan that shows it can grow significantly in the next two to five years.

“The theory is that the largest companies have the greatest potential to employ people, generate tax revenues, make charitable contributions and overall drive the economy,” German said.

Mentors at the accelerators act as advisers, meeting with company owners, helping them improve operations and build strategies. They also connect owners with big customers.

Large corporations provide contract opportunities, mentoring or both. In Cincinnati, Fortune 500 members Macys Inc. and Procter & Gamble Co. are among those that have given more business to minority companies.

“What we do is try and not only provide counsel for the accelerator, but also connect the dots, the needs of our company with those of suppliers that are coming up in their ability to deal with P&G and Macy’s,” said Amy Hanson, a Macy’s vice president and head of the accelerator’s leadership council.

Why do they exist?

Local chambers of commerce and economic development agencies have launched accelerators to help minority businesses create jobs. Officials say the inability of minority companies to expand holds back a region’s economic growth.

“Look at the number of minority business enterprises and how many are able to build jobs. It’s grossly disproportionate from their majority counterparts,” said Nika White, vice president of diversity and inclusion at the Greenville Chamber of Commerce.

One reason for the disparity is that a small company may not have the infrastructure, such as computer systems, and the experience to operate on the level needed to fulfill a big contract, said Jeffrey Robinson, a professor of management and entrepreneurship at Rutgers University. He is working on the Newark accelerator.

“There’s a leap you have to take from the five-person company to a couple hundred, to being a multimillion-dollar company. You can’t run them the same way,” Robinson said.

Minority-owned companies still aren’t getting the big contracts they should, says Leonard Greenhalgh, a professor of management at the Tuck School of Business at Dartmouth College. Big businesses tend to keep the same suppliers for years unless there are problems or a technological change, he said.

“It’s white males buying from white males,” Greenhalgh said. “Minority- and women-owned suppliers are both incredibly important to the future of the economy. That’s why you need accelerators.”

There’s also a perception in the business world that minority companies aren’t up to the task, says Gravely, the TriVersity owner. Other companies believe minority businesses may not be able to fulfill a contract because they don’t have enough workers. Some believe that minority businesses aren’t professional enough.

“I’ve got to overcome a negative perception — not negative to me personally, but generally. I have to prove a capability,” said Gravely, who’s also chair of the Cincinnati Chamber of Commerce.

What is business like now?

After nearly nine years in the Cincinnati program, the goals for World Pac Paper are still to grow through contracts or expansion.

“We work with them on their strategy every year, who they’re targeting, what industries they’re trying to get into, what products or services they want to add,” said Denise deSilva Litter, a mentor in the program. “A lot of the work we do with (owner Edgar Smith) is conversation.”

Litter, who has worked in corporate purchasing, and other mentors are in continual contact with the big corporations and organizations that agree to work with companies in the accelerator to find out about available contracts that might be a good fit.

After a target is chosen, Litter helps a small business set up a meeting with the larger company.

That was the appeal of the accelerator for Tillie Hidalgo Lima, the owner of Best Upon Request, a concierge services provider that has been in the program since 2010. Her company was already growing, but not thriving.

The accelerator has helped her get contracts with Fifth Third Bank Corp. and the Cincinnati Children’s Hospital Medical Center.

“I saw the accelerator as something that could give us a lift,” she said.

‘DON’T KNOW WHAT YOU DON’T KNOW’

In Greenville, Ava Smith has enrolled in the accelerator there because she’s being approached by companies all over the U.S. and she wants to be sure she can handle all the new business that comes her way. The program is in its first year.

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“You don’t know what you don’t know,” says Smith, owner of Flat Fee Hiring, a 12-year-old recruiting company in Greenville. “I’m going to the next level where I need to think like a CEO instead of a small business.”